NEW DELHI: Prime Minister Narendra Modi suffered a heavy defeat on Sunday in an election in Bihar, India's third most-populous state, signalling the waning power of a leader who until recently had an unrivalled reputation as a vote winner.

Modi's second straight regional election setback will galvanise opposition parties, embolden rivals in his own party and diminish his standing with foreign leaders amid concern he may not win a second term as prime minister.

"This is a clear indication that Modi's popularity may now have peaked," said Satish Misra, a political analyst at the Observer Research Foundation.

The loss in Bihar will also hamper Modi's push to pass economic reforms, because he needs to win most state elections in the next three years to gain full control of parliament.

Bihar is one of its biggest electoral prizes and the most pressing challenges of India prevail there, including widespread poverty, corruption and poor infrastructure. If independent, its 104 million people would be the world's 13th-largest nation, more populous than Germany.

The loss will make it harder for Modi to secure backing for reforms in parliament's upper house where his party is in a minority and seat allocations are dependent on parties' strength in the states. His government has struggled to pass laws, including the biggest overhaul of taxes since independence.

"It raises the likelihood that the opposition will use this mandate to block important bills," said Milan Vaishnav of Carnegie Endowment for International Peace.

This may have been Modi's last chance to win a state election before the spring of 2017. He faces five elections next year in regions where his party has failed to make inroads.